Black denies money hidden

Bloomberg NewsCHICAGO TRIBUNE

Conrad Black, accused of stealing $60 million from Hollinger International Inc., said he didn't try to hide non-compete payments that he and other executives received from the sale of company newspapers as federal prosecutors claim.

Speaking Friday outside the Chicago courthouse where his trial is being held, Black cited as an example the payments related to the 2001 sale of Canadian newspapers to CanWest Global Communications Corp.

He said that the sale was an "outstanding" deal, that he had no reason to hide the non-compete payments attached to it and that he favored making them public.

"We made $1 billion Canadian [$891 million U.S.] in three years in a stagnant industry" from that sale, Black said.

Prosecutors say the sale was used as a pretext to shift $26.4 million to Ravelston Corp., Black's holding company, and to give two then-Hollinger executives on trial with him improper bonuses of $1.3 million each.

Black characterized as "rubbish" prosecution claims that the payments were improper.

Prosecutors spent the past week of the trial presenting evidence to bolster their case that Hollinger publicly released information regarding non-compete payments from CanWest only because a New York law firm discovered the money during an examination of company books in preparation for a bond sale.

Attempting to undercut prosecutors' claims that Black and his co-defendants harmed Hollinger, Edward Genson, Black's lead trial lawyer, showed jurors Friday a series of letters between his client and CanWest's former chairman, the late Israel Asper. The letters document negotiations leading up to Hollinger's $2.1 billion asset sale to CanWest.

"The transaction envisioned here would be a historic event for Canada and a model for similar convergence activities throughout the Western world," Asper wrote Black, then Hollinger's chairman, in one of the letters in which the Palm Beach, Fla., neighbors called each other "Izzy" and "Conrad." The deal made CanWest the largest media company in Canada.

"We're willing to be flexible," Black told Asper in a letter, referring to $19 million Canadian annual payments for management services he was seeking. Black lowered that amount to $6 million Canadian, enabling Hollinger to collect $60 million Canadian more from the sale, according to company records.

Black's Toronto-based lawyer Edward Greenspan declined to say whether he would call Asper's son, Leonard, the chief executive of CanWest, as a witness. Greenspan said he was "not unhappy" with the progress of the case.

Black, former Hollinger Vice President Peter Atkinson and former finance chief John Boultbee are accused of stealing Hollinger money as they engineered the sale of more than $3 billion in assets between 1998 and 2001. Mark Kipnis, Hollinger's former general counsel, is charged with helping them. Defense lawyers say Hollinger's board approved the payments.

Hollinger, which publishes the Chicago Sun-Times, is now known as Sun-Times Media Group Inc.